Szumigala, Harbo, and Hughes—Alaska’s Mineral Industry 2009— Alaska’s Mineral Industry 2009 SPECIAL REPORT 64 Division of Geological & Geophysical Surveys Special Report 64 DIVISION OF GEOLOGICAL & GEOPHYSICAL SURVEYS in cooperation with Division of Economic Development Alaska’s Mineral Industry 2009 by D.J. Szumigala, L.A. Harbo, and R.A. Hughes SPECIAL REPORT 64 DEPARTMENT OF NATURAL RESOURCES Division of Geological & Geophysical Surveys in cooperation with DEPARTMENT OF COMMERCE, COMMUNITY & ECONOMIC DEVELOPMENT Division of Economic Development Front wraparound cover photo: Mill, crusher, and processing plant at the Kensington Mine; Jualin Portal is nearby. The crushed ore bin is at left and the freshwater tank is at right. Lions Head Mountain towers in the background. Vertical photos, top to bottom: • Gold in quartz–pyrite vein from the Kensington Mine. • Conveyor belt transports ore to top of crushed ore bin at Kensington mill facilities. • A Kensington Mine worker logs drill core at the Comet Beach core facility. • Interior of the Kensington mill facility with the grinding units in the foreground. • Tug and barge with a load of supplies and equipment heads to the Kensington Mine project. • Mine worker is silhouetted in Comet Portal entrance. All photos courtesy of Coeur Alaska Inc. The QR (quick response) code in the bottom corner of the front cover is an encoded URL, scannable by mobile devices. This URL will take you to the web page for this report, http://www.dggs.alaska. gov/pubs/pubs?reqtype=citation&ID=21881 STATE OF ALASKA Sean Parnell, Governor DEPARTMENT OF COMMERCE, COMMUNITY & ECONOMIC DEVELOPMENT Susan K. Bell, Commissioner DIVISION OF ECONOMIC DEVELOPMENT Wanetta Ayers, Director DEPARTMENT OF NATURAL RESOURCES Tom Irwin, Commissioner DIVISION OF GEOLOGICAL & GEOPHYSICAL SURVEYS Robert F. Swenson, State Geologist and Director DGGS publications may be inspected at the following locations. Address mail orders to the Fairbanks office. Alaska Division of Geological University of Alaska Anchorage & Geophysical Surveys Consortium Library ATTN: Geologic Communications 3211 Providence Drive 3354 College Road Anchorage, Alaska 99508 Fairbanks, Alaska 99709-3707 Elmer E. Rasmuson Library ARLIS (Alaska Resource Library University of Alaska Fairbanks and Information Service) Fairbanks, Alaska 99775-1005 3211 Providence Drive Anchorage, Alaska 99508 Alaska State Library State Office Building, 8th Floor 333 Willoughby Avenue Juneau, Alaska 99811-0571 This publication, released by the Division of Geological & Geophysical Surveys (DGGS), was produced and printed in Fairbanks, Alaska, by UAF Printing Services, at a cost of $6.94 per copy. Authority to print this and other publications comes from Alaska Statute 41.08.020, which charges DGGS “to determine the potential of Alaskan land for production of metals, minerals, fuels, and geothermal resources; the location and supplies of groundwater and construction materials; the potential geologic hazards to buildings, roads, bridges, and other installations and structures; and . conduct such other surveys and investigations as will advance knowledge of the geology of Alaska.” In addition, Alaska Statute 41.08.030 states, “The state geologist shall print and publish an annual report and such other special and topical reports and maps as may be desirable for the benefit of the state…” NOTE: Mention of any company or brand name does not constitute endorsement by any branch or employee of the State of Alaska. EXECUTIVE SUMMARY Alaska’s Mineral Industry 2009 is the 29th annual report produced by the Division of Geological & Geophysical Sur- veys (DGGS, an agency of the Department of Natural Resources) and the Division of Economic Development (of the Department of Commerce, Community and Economic Development). This report and data supersede the summary report published earlier this year, DGGS Information Circular 60. The total value of Alaska’s mineral industry in 2009 dropped to $2.966 billion, $204.2 million and nearly 7 percent lower than 2008’s value of $3.171 billion. The decline in total value resulted from a decrease in spending on explora- tion and development. The total value is a combination of expenses and receipts, and although it is not a typical ac- counting tool, it is an effective way to track the annual strength of the mineral industry. The year 2009 was the 14th consecutive year that the total value of the Alaska mineral industry exceeded $1 billion and the fourth consecutive year the total value exceeded $2 billion. Total employment by the Alaska minerals industry in 2009 was 3,280 full-time-equivalent jobs, a decrease of 112 jobs (3.5 percent) from the 2008 total of 3,392 full-time-equivalent jobs. The largest change in employment compared to 2008 was the drop in mineral development jobs from 516 to 371, a 28 percent decrease. The average monthly wage for mining in Alaska during 2009 was $7,588. The mineral industry paid a total of $67.94 million in royalty and tax payments to the State of Alaska and Alaska municipalities in 2008. The total for 2009 payments was not available at press time. State mineral rents and royalties amounted to $6.4 million; sales of rock, sand, and gravel amounted to $4.7 million; and mining license taxes totaled $29.73 million in 2009. Mining companies were the largest taxpayers in the City and Borough of Juneau and the Fairbanks North Star Borough. Red Dog Mine paid $6.7 million to the Northwest Arctic Borough in 2009 as Payment in Lieu of Taxes (PILT). Mining companies contributed to the Denali Borough through PILT and severance tax pay- ments. The Alaska Industrial Development & Export Authority (AIDEA) was paid annual user fees of $15.9 million by mining companies for use of the DeLong Mountain Regional Transportation System and the Skagway Ore Terminal. Exploration expenditures were $180 million, a 48 percent drop from the record $347.3 million expended on explora- tion in 2008. Mineral exploration expenditures in Alaska account for approximately one-third of the United States total. At least 62 Alaskan projects spent more than $100,000 each and 23 of those projects spent more than $1 million each. These projects spanned Alaska. Copper–gold–molybdenum porphyry systems were the major exploration target in 2009, followed by intrusion-related gold deposits. Exploration was also conducted on various gold–quartz vein deposits; base-metal-rich, polymetallic massive-sulfide deposits; platinum-group-element–nickel–copper ultramafic- hosted deposits; and rare-earth-element, diamond, tin, coal, placer gold, and other deposit types. The Money Knob deposit near Livengood led the pack in new mineral discoveries and drilling footage total. Advanced exploration proj- ects include the 35.3-million-ounce Donlin Creek intrusion-hosted gold project near Aniak, the Pebble copper–gold– molybdenum porphyry project in southwestern Alaska, and the Niblack polymetallic volcanogenic massive sulfide project in southeastern Alaska. The Pebble project, with estimated resources of 72 billion pounds of copper, 94 million ounces of gold, and 4.8 billion pounds of molybdenum, was the largest exploration project in 2009. Development expenditures for 2009, reported for 27 projects, totaled $330.8 million, down 16.5 percent from the $396.2 million spent in 2008, but still the sixth year with development expenditures exceeding $200 million. Tailings storage facilities were expanded at Red Dog Mine. All major underground development activities and surface facilities at Kensington except the tailings facility were completed in 2009. At Fort Knox Mine, construction of the heap leach facilities continued, studies were initiated regarding increasing the height of the tailings dam, and final reclamation of True North began. At Nixon Fork Mine, an evaluation plan began, and a new resource estimate is expected in fall 2010. At Greens Creek Mine, underground in-fill drilling and preliminary production expenditures were noted. Rock Creek Mine continued in care and maintenance status. PacRim Coal LP continued environmental, permitting, and engineering work on the Chuitna Coal project near Anchorage. Mineral production volumes remain strong, and the value of mineral production was slightly higher in 2009 than in 2008. Production values for 2009 were $2,455.6 million compared to $2,427.1 million in 2008, an increase of more than 1 percent. Production volumes of zinc, lead, silver, and placer gold increased; the production volume of lode gold declined slightly. The value of zinc, silver, and gold produced increased, whereas the value of lead produced declined 6 percent. Zinc accounted for 43.5 percent of the total production value, followed by gold at 30.9 percent. iii Red Dog Mine was the largest mineral producer in Alaska during 2009, with 53.3 percent of the production val- ue. Other significant producers, in order of value of product, were Pogo Mine (15.4 percent), Greens Creek Mine (12.9 percent), and Fort Knox Mine (10.4 percent). International mineral exports from all companies were valued at $980 million. Zinc production from all Alaskan producers totaled 712,496 tons in 2009. Lead production was 167,204 tons. Gold production was 780,657 ounces, and silver production was estimated at 15.6 million ounces. Sand and gravel produc- tion was 7.1 million tons and rock production was 1.8 million tons; however, reporting shortages were noted in this sector. More than 1.86 million tons of coal was produced. Peat production was estimated to be 240,510 cubic yards; reporting deficits were also noted in this area. Hard-rock (lode) gold production decreased approximately 3 percent in 2009, to 720,407 ounces from 743,993 ounces in 2008. Pogo Mine was the largest producer of gold in Alaska with 389,808 ounces produced. Placer production in Alaska increased in 2009 to 60,250 ounces, up more than 6 percent from 56,759 ounces in 2008. Approximately 234 placer gold operations reported production in Alaska in 2009 compared to 195 in 2008.